Estonia Endorses 2026 State Budget

2025-09-25 03:10:56

(MENAFN) The Estonian government has formally approved its 2026 state budget, revealing a widening fiscal deficit projected to reach 4.5% of gross domestic product (GDP), officials announced on Wednesday.

Under the newly endorsed plan, total revenues are expected to reach 18.6 billion euros (approximately 21.8 billion U.S. dollars), while expenditures will climb to 19.5 billion euros. The budget allocates 1.3 billion euros for investment spending.

Defense funding represents the most significant cost driver, with military expenditures set to rise to 5% of GDP—a move that will demand an extra 844.5 million euros, government figures show.

The Fiscal Council, operating under the Bank of Estonia, issued a critical assessment of the financial roadmap. It stated that recent government decisions have further weakened the nation’s public finances. “Such policies will lead to higher borrowing costs for both the public and private sectors,” the council warned.

In a report cited by a local broadcasting agency, the council added that the medium-term fiscal outlook, covering 2026 to 2029, has deteriorated since the budget strategy talks concluded.

The government plans to deliver the draft budget to Parliament by September 30.
(Exchange rate: 1 euro = 1.17 U.S. dollars)

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